A. THE BASICS OF FEEDER FUNDS F R E Q U E N T L Y A S K E D Q U E S T I O N S 1. What is a Feeder Fund? A Feeder Fund is a UITF which invests at least 90% of its assets in a single Collective Investment Scheme known as the Target Fund (e.g. Exchange Traded Fund (ETF)). 2. What are the advantages of a Feeder Fund? Feeder Funds provide an efficient and easy access to investment outlets otherwise available or accessible only to large institutional investors. It allows for a very focused investment strategy given its single underlying investment, and thus can be easily added to an investment portfolio. It is a great diversification tool because: a. It invests in a fund that holds various underlying securities, which taken collectively, is expected to provide the risk-return combination to satisfy the investment objective of the client. b. Especially for Feeder Funds invested in global funds, it is an effective means for accessing international/global securities for those who want to increase their exposure other than the Philippines. B. THE NEW BPI FEEDER FUNDS 3. What are the two (2) new equity index feeder funds? The BPI US Equity Index Feeder Fund, operating as a Feeder Fund is an index tracker Unit Investment Trust Fund (UITF) that aims to achieve for its participants investment returns that closely track the total return of the S&P 500 Index, before fees and expenses. The Fund invests at least 90% of its assets in the Target Fund, SPDR S&P500 ETF Trust. The BPI European Equity Index Feeder Fund, operating as a Feeder Fund is an index tracker Unit Investment Trust Fund (UITF) that aims to achieve for its participants investment returns that closely track the total return of the Euro Stoxx 50 Index, before fees and expenses. The Fund invests at least 90% of its assets in the Target Fund, SPDR Euro Stoxx 50 ETF.
4. Why should I invest in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Funds? If you have been wanting to invest in the stocks comprising the S&P 500 Index and/or the Euro Stoxx 50 Index, now is your chance! The BPI US Equity Index Feeder Fund is the first Fund in the country to track the performance of one of the major US stock indices, the S&P 500 Index. Based on MSCI Indices over the past 10 years, US equities, compared to other regional stock markets, exhibit relatively lower volatility. The BPI European Equity Index Feeder Fund on the other hand, is the first Fund in the country to track the performance of one of the major stock European stock indices, the Euro Stoxx 50 Index. These funds are appropriate for investors seeking capital growth for their US dollars over the long-term. 5. What is the minimum initial amount to be able to invest in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? Minimum initial investment for each of the Funds is One Thousand US Dollars (USD1,000) only, and minimum additional investment of Five Hundred US Dollars (USD500) only. 6. How do I invest in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? a. For clients with existing UITF investments with BPI Depending on your risk profile, you may readily subscribe to these new funds, through a BPI Branch or through Expressonline, without the need to open a new account. As equity index funds, the BPI US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund are suitable for clients with an aggressive risk profile. b. For registered EOL Users Open an investment account via BPI Expressonline even if you do not have an existing UITF account with AMTG. You will need to fill the information online and print the account opening form at the end. Sign the hardcopy and send them to your preferred BPI Branch. c. For non-bpi clients If you are new to BPI, you are required to open a BPI deposit or savings account as settlement account for your investment fund transactions. You will be made to undertake a CST to determine your risk profile which is the UITF Marketing Personnel's basis for recommending certain fund types. The UITF-marketing personnel in the BPI Branch will assist you through the UITF account opening process.
7. Who are allowed to invest in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? Clients with an Aggressive risk profile are the ones allowed to invest in the Funds. Consult a UITF-marketing personnel if your risk profile is otherwise and you want to invest in these Funds. 8. Are the two feeder funds available in all BPI branches? Yes, the BPI US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund are available in all BPI branches as well as in BPI ExpressOnline. 9. Are the two feeder funds available in EOL? Yes, the BPI US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund are available in BPI Expressonline for online viewing, account opening, subscription, redemption, and enrollment to the Regular Subscription Plan (RSP). 10. Can I enroll the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund in the Regular Subscription Plan? Yes, Regular subscription plan is available for the BPI US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund. You can regularly invest in the Funds for as low as Five Hundred (USD500) per month or every quarter. We suggest that you already enroll the Fund/s in the RSP as soon as your initial investment so you will not be requested another USD1,000 the next time around just to enroll it in RSP. Unfunded subsequent contributions under the RSP are not charged any penalties and will not affect the schedule or continuity of your RSP. 11. What reports shall I receive when I invest in any of the two funds? Investors of the BPI US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund shall receive a transaction advice for every subscription or redemption transaction. This is the only OFFICIAL document evidencing/confirming your transaction and placement in the Fund/s. You also receive Quarterly Financial Statements and copies of the Fund Performance Reports by the end of every quarter. 12. What is the cut-off time for subscribing/redeeming units in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? The cut-off time for subscribing and redeeming in the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund is 2:00PM. Orders done after the cut-off time will be considered for the next banking day s transaction.
Subscription settlement is at the end of the next day following valuation day. Redemptions received on or before the cut-off time are settled on the 8th banking day from the valuation day using the NAVPU of that valuation day as the basis for the settlement. 13. What fees apply for the BPI US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? Just the usual trust fee of 0.75% p.a. The trust fee is already embedded in the daily calculation of the Net Asset Value/Net Asset Value per Unit of each of the Funds such that published NAVPUs are already net of trust fees. 14. How long is the holding period of the US Equity Index Feeder Fund/BPI European Equity Index Feeder Fund? Like the other BPI UITFs, the US Equity Index Feeder Fund and BPI European Equity Index Feeder Fund DO NOT have a holding period. Investors can buy or sell his/her units anytime. Of course we encourage our investors to invest their funds on a long-term basis to maximize the earning potential of their funds. C. MORE INFORMATION ON THE TARGET FUNDS 15. What are the Target Funds of the BPI US Equity Index Feeder Fund and of the BPI European Equity Index Feeder Fund? The Target Fund of the BPI US Equity Index Feeder Fund is the SPDR S&P50 ETF Trust. This Target Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500 Index. The Target Fund of the BPI European Equity Index Feeder Fund is the SPDR Euro Stoxx 50 ETF. This Target Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the EURO STOXX 50 Index. SPDR S&P50 ETF Trust and EURO STOXX 50 Index are ETFs listed in the New York Stock Exchange and regulated by the United States of America Securities and Exchange Commission. 16. What is an Exchange Traded Fund (ETF)? An ETF is a fund, usually an index-tracker, which trades in an exchange at its market price. It also computes for this daily NAVPS but only market-makers/authorized participants can trade the Fund directly at its NAVPS, and usually by exchanging a basket of the underlying securities. Feeder funds buy the ETF through the exchange like a stock.
17. What are the S&P 500 and Euro Stoxx 50 Indices? The S&P 500 Index is a market-cap weighted index of 500 US stocks representing all major industries that measures the performance of the broad US domestic economy. This index is rebalanced quarterly. The Euro Stoxx 50 Index is a market-cap weighted index of 50 Blue-chip Eurozone stocks. The index covers 50 stocks from 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. This index is rebalanced annually. 18. What are the Top 10 Holdings of the SPDR S&P50 ETF Trust? TOP 10 HOLDINGS 1 Apple Inc. 3.22% 2 Exxon Mobil Corporation 2.48% 3 Microsoft Corporation 1.80% 4 Johnson & Johnson 1.70% 5 General Electric Company 1.51% 6 Wells Fargo & Company 1.45% 7 Chevron Corporation 1.43% 8 Berkshire Hathaway Inc. Class B 1.31% 9 JPMorgan Chase & Co. 1.25% 10 Procter & Gamble Company 1.22% Source: Fund Fact Sheet, June 30, 2014 19. What are the Top 10 Holdings of the SPDR Euro Stoxx 50 ETF? TOP 10 HOLDINGS 1 Total SA 6.22% 2 Sanofi 4.63% 3 Banco Santander S.A. 4.45% 4 Bayer AG 4.23% 5 Siemens AG 3.98% 6 BASF SE 3.87% 7 Daimler AG 3.33% 8 Anheuser-Busch InBev SA 3.18% 9 BNP Paribas SA Class A 2.76% 10 Allianz SE 2.73% Source: Fund Fact Sheet, June 30, 2014